Bipartisan talks on increasing the nation’s debt limit, which have morphed into a wider discussion about deficit reduction, resume today. Republicans in recent weeks have said that they will only raise the debt limit by a dollar amount equal to the amount of long-term savings. Therefore, a $2 trillion increase in the debt limit – probably enough to get through the 2012 elections – would have to be accompanied by $2 trillion in deficit reduction.

Despite the charges and counter-charges over Paul Ryan’s budget and the end of Medicare as we know it, today’s session will be focused on Medicare and health care spending in general:

The Tuesday session, which will be held on Capitol Hill, is expected to focus on healthcare spending, according to a source close to the discussions.

Analysts at the non-partisan Committee for a Responsible Federal Budget estimate that savings to the U.S. budget deficit of between $25 billion and $130 billion could be achieved over 10 years by increasing the costs to people in the Medicare healthcare program for the elderly.

Biden’s group has initially focused on areas where the two sides can most easily agree.

The Committee for a Responsible Federal Budget estimates that these areas could yield deficit savings of between $1 and $2 trillion over the next decade.

Potential savings in Medicaid will also be a feature of today’s talks, and we already know that Medicaid is in peril, with a less-publicized but just as harmful plan that would kick millions off the rolls in play.

As much as the Ryan budget was a catastrophic political mistake for House Republicans, these talks – particularly today’s focus – offers an opportunity for Ryan and the GOP to save face. If they get a budget deal, especially one with cuts to Medicare or Medicaid, they can credibly say that their boldness to talk frankly about entitlements ended up succeeding in chipping away at the problem. And Democrats could hardly position themselves as the defenders of Medicare if they enact a grand bargain that shifts cost-sharing onto seniors. But while Democrats would essentially let the GOP off the hook in such a scenario, there would be appeal for Obama to do so, particularly since achieving a “grand bargain” on the deficit has been one of his early goals:

Obviously, a big winner out of a deal like that would be Obama himself, who could take a major issue off the table and demonstrate his ability to work in a bipartisan fashion, and solidify himself amongst affluent independents. There would, however, be a couple huge losers. One is the Republican presidential nominee, who could still run on the economy but would face a steeper climb. The other, bigger loser is House Democrats, who would forfeit what might be their only chance for a long time to take back the House.

The “winners” in this deal have the ability to implement it: the White House, along with the House GOP. The “losers” don’t – the Republican nominee has no vote, and for all intents and purposes the House Democrats don’t either. More liberal Senate Democrats could step up and stop this huge mistake from happening, but if reconciliation is used to achieve these Medicare and Medicaid savings, the threshold for passage would only be 50 votes, an easier hurdle if there’s buy-in from enough Republicans.

The major assumption here is that House Republicans could stomach making a deal of this magnitude with the President, and a lesser assumption is that the Senate Democratic leadership would demand next to nothing in order for it to happen. Democrats and the White House have demanded revenue increases as part of a deal, and Republicans like Mitch McConnell have actually shifted their rhetoric subtly to accommodate this, changing their opposition to taxes to an opposition to “tax rates” (closing loopholes would then be eligible). But that doesn’t mean they would keep to their word, or that their rank and file would oblige any leadership deal. Most of them are still raging at anyone who won’t agree to destroy Medicare, despite how this has dragged down their party.

The rift is wide enough that this remains a longshot. But they wouldn’t be talking about it today if it couldn’t happen.